Tuesday, November 13, 2007

The problem with hybrids...

Some are trying to revolutionize the trucking industry with hybrids. However, this Reuter's report talks about the problems from the trucking industry.

To quote:

Added weight from a second powertrain can limit a trucker's haul -- increasing per ton transport costs

That's exactly the problem with today's hybrids - from the Toyota Prius to the trucks mentioned in this article. Why? There is absolutely no reason for having TWO drive trains.

The solution? I theorized about this in 7th grade for a science fair project (and still pretty sure it could have been done even then), and have written about it recently on this blog too - a single electric drive power train that is driven entirely by battery power; the batteries can then be recharged either through plug-in, or through a small generator that kicks in only long enough to recharge the batteries while the vehicle is in full use.

In fact, that should be even more feasible now than it was in 1994 since we have all these technologies to reclaim energy from braking and other activities and divert that power into the batteries.

Sadly, it looks like the first such vehicle will be GM's Volt due to be released in 2010.

Unfortunately, for the trucking industry - you have a lot more rugged condition that the vehicles need to stand up to - mostly for construction site conditions and any other off-road condition. (They face the same basic problem that off-roaders face too.) This makes it harder for the electrical drive train, which has to be protected even more, especially against water. I personally think that at least the vehicles that need these kinds of ruggedness will be the last to go electric. Semis, and all other road vehicles that only need normal road conditions will be there pretty shortly, in my opinion. (That is only based on my limited knowledge of the mechanics behind it; not on any actual industry info. But it should be what happens.)

[Edit: In another story, Porsche had one of these "serial hybrids" in 1901. So it was definitely achievable in 1994.]

Friday, November 09, 2007

Home sales and the economy...

So apparently the builder's don't get it, or at least that is the report from an article in the NYTimes. They realize there some issues, but they're blaming the press on the duration of it. Well...they need to get a grip on reality because here are the reasons for it:

1) The builders built too many houses.
2) The builders built too many expensive houses.
3) Buyers (in certain regions - e.g. Northern Virginia, Atlanta, California, etc.) have pushed the housing prices up and up and up, and created a bubble that is now deflating.
4) Mortgage lenders offer bad loans and qualified buyers they shouldn't have.
5) Some cities (e.g. Columbus, OH) decided to clean-up downtown and move the poor folk out by helping them get qualified for those bad loans, thus making them someone else's problem.
6) Some areas(e.g. Loudoun County, VA) decided to set building codes that pushed property values up, primarily to preserve their way of life - spacious housing.
7) The average buyer can no longer afford to buy a house, condo, townhouse, or even an apartment. So young families are in trouble of finding places to live where the parent(s) have a decent commute (1/2 hour or less) to work with a job(s) that pays well enough to support the family.
8) Established households can't afford to buy a new house where they live. (Several years ago I had one high up general manager where I work say that he couldn't afford to buy his own house if he had to.)

And the list goes on. However, the Federal Reserve Chairman, Ben S. Bernanke, seems to get it:

Mr. Bernanke offered a rocky outlook for the months ahead. He said the battered housing market had yet to hit bottom, that delinquencies and foreclosures were likely to rise and that the depression in home-building was “likely to intensify.” He predicted that personal spending would advance more slowly, because consumers were less confident and because of tighter credit conditions.

- Quote from this NY Times article.

Yes, the depression on housing is going to intensify - prices have to come down to where normal people can afford to buy a house - and by normal I mean people with a $50k a year salary that have little to no debt, save may be college debt, with a good credit score. When that happens, then expect the housing market to turn around, no sooner.

So what can the builders do to help? Tear down the multi-hundred-thousand dollar homes they've been building, cut the lots to a quarter acre - even a half acre - and then put up a more reasonable homestead that most people can afford. Make $300k the top end, and $120k the bottom end. Then work with lenders to provide good, solid loans that are not going to destroy people's credit (e.g. variable rate interest loans, interest only loans, etc.). And inform buyers that lenders will work with them to keep them from foreclosure. People will buy - but you have to make it a safe market to do so.

Right now, the market is not safe. Answer the big question - if I sell in 5 years (a lot of people do), then could I get my money out of it at the very least? Right now, the answer is a very flat, absolute, and resounding NO. Turn it into a 'yes' and people will buy. (My wife and I did not recently buy for that very reason; we opted to continue renting - why? we didn't know where we'd be in 5 years and might need to move out of state, so it was too risky for us to buy at present.)